The unaudited financial result of Okomu Oil Plc for the first quarters ended March 31, 2024 released on Monday showed a remarkable improve in revenue generation as well as converting earnings to prospective reward to investors.
The company posted a profit after tax growth of 48.2 percent year on year (y/y) to N15.08 billion as against N10.18 billion in the corresponding period of 2023, translating to an earning per share of N15.81 up from N10.67 in 2023 indicating higher prospect of dividend distribution to shareholders.
Revenue grew by 79.6 percent y/y to N43.48 billion in Q1, ’24, up from N24.21 in Q1, ’23, primarily driven by solid growth in local sales which rose by 72.5 percent y/y as well as export revenue up by 194.4 percent y/y.
The higher sales print was driven by the effect of the local currency devaluation on Crude Palm Oil (CPO) prices, which triggered an increase in local CPO prices.
Sequentially, revenue increased markedly by 203.2 percent q/q, most likely driven by higher volumes, given that half year (Q1 and Q2) is typically the peak period for oil palm sales.
Gross margin contracted by 560bps to 76.3 percent in Q1 ’24 as against 81.9 percent posted in Q1 ’23, due to a faster growth in cost of sales which rose by 135.1 percent y/y to N10.32 billion relative to revenue growth of 79.6 percent y/y.
There are indications that currency devaluation must have caused a spike in plantation costs due to increased fertilizer costs amid pressure from higher energy prices.
Consequently, the EBIT margin declined by 542bps to 57.1 percent inQ1 ’23 as against 62.5 percent even as Opex-to-sales ratio declined to 19.2 percent in Q1 ’24 from 19.3 percent in Q1, ‘24.
Net finance cost increased by 609.3 percent y/y to N1.79 billion in Q1 ’23 up from N252.77 million, following a 17.8x jump in finance costs to N4.51 billion, driven majorly by exchange losses in the period amounting to N4.29 billion compared with N7.29 million in Q1 ‘23.
Meanwhile, finance income soared to N2.72 billion in Q1 ’24 up from N1.16 million in Q1 ’23.
Overall, the company recorded a PBT growth of 54.8 percent y/y to N23.03 billion in Q1 ‘24 far above N14.88 billion reported in Q1 ‘23.
Following a tax expense of NGN7.95 billion, profit after tax grew by 48.2 percent y/y to NGN15.08 billion in the period under review as against N10.18 billion in the corresponding period of 2023.
